Things to be kept in mind before taking education loan

Want a ticket to your dream college and career? Education Loan can be a ticket to it.

Despite high living and education cost, number of Indian students pursuing undergraduate, graduate and post- graduate degrees from abroad is continuously increasing. For students whose parents sponsors their courses or are getting a scholarship it is manageable, but those students who need to pay on their own struggle the most. Therefore, in such a situation education loan comes handy.

For deserving students, education loan seems like a blessing. It provides upfront expenses for tuitions, college fee etc., however, it is not easy to get an education loan and paying it back.

Education loan is the first big financial decision that you have to make. To help you make an informed decision, we have brought forward certain points that are to be considered before taking an education loan.

The right choice of course for education: At the very first, order your priorities before choosing a course especially the one for which you are planning to take a loan. Ensure that it is the best course that is offered in the respective stream. Get information about facilities, faculties and research opportunities available in that university. Interact with students or alumni of that course to know the ground reality. Also, do not forget to consider your exam scores and CGPA.

The opportunity of a job after that course: Education is usually meant for a better salary package, right! So, one should always consider the job opportunities available to him or her after pursuing that course. Students must know, the minimum salary package, they are likely to get after completing the course. This will give you a clear picture of loan repayment.

Take the loan from government recognized or private bank: Another very important thing for students to remember is, always take a loan from a government recognized or a private bank because education loan comes with tax benefits under Section 80 E of the Income-tax Act. Students can avail this tax benefit. Read on, How to apply for students Loan.

An existing loan, if any: Before burdening your family with another big amount of debt, discuss with them whether they have taken any other loan prior to this one. If yes and the loan amount is smaller, then there is no reason to worry but if the existing loan amount is bigger then avoid taking another loan simultaneously. As this is going to affect the family income and saving.

Repayment period and interest rate: Once you are sure of everything, about your course, about the education loan, compare and evaluate the loan options available to you. Compare the time of repayment available as well as the rate of interest provided by various banks. A short duration of loan repayment will prevent you to pay a larger sum of interest for over a longer period of time but it may feel like a hole in your pocket. Therefore, it is advisable for students to take loan with longer repayment tenure so that they can pay thin EMIs and avail tax saving benefits. Hope you know the 6 tips to tackle student’s loan repayment.

So, don’t wait! Go ahead! Keep these points in mind and do not stop yourself from chasing your dream college and career because of monetary fears.